Cable keeps the mixed outlook for the time being, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We expected GBP to strengthen yesterday but were of the view that ‘prospect for a break of the strong resistance at 1.3200 is not high’. However, GBP soared to a high of 1.3219 before ending the day on a firm note at 1.3210 (+0.46%). The rapid advance appears to be running ahead of itself but is not showing any sign of weakness just yet. From here, GBP could continue to strengthen but the odds for a sustained rise above last week’s top near 1.3265 are not high (there is another strong resistance at 1.3300). On the downside, a breach of 1.3140 (minor support is at 1.3175) would indicate the current upward pressure has eased.”
Next 1-3 weeks: “Yesterday (26 Aug, spot at 1.3145), we indicated that the ‘odds for GBP to move to 1.2980 have diminished’. GBP subsequently cracked the 1.3200 ‘strong resistance’ level and the recent build-up in downward momentum has dissipated. From here, the outlook for GBP is mixed. Looking back, the movement in GBP for most of this month has been erratic especially over the past several days where there were several relatively large (and rapid) but short-lived swings. For now, GBP could continue to trade in a choppy manner between the two major levels of 1.3000 and 1.3300. Only a clear break of either one of the two levels would indicate the start of a more sustained directional move.”
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